5 Crucial Elements to Run a Successful Business
Starting out with your own business venture, which provides you with a steady stream of income for your retirement days, is something like a dream for everyone. However, this dream seldom comes true. According to a research report in 2019, the percentage of successful business startups was around 10%. The report showed that almost 22% startups don’t make it past their first year, 30% startups fail during their second year, another 50% are forced to shut down in their fifth year and around 70% startups hit their bottom in the 10th year.
Now, with a failure rate this high, you might think that people would not try doing this. However, this is not the case. There are millions of entrepreneurs, who are trying relentlessly to make it in this extremely competitive and ruthless business world. Of course, there are many research studies, which provide insight about the reasons why most businesses are not successful.
How to Avoid Failure
Of course, with a failure rate of around 90%, there might be something very wrong about the approach most people have when they start a business. According to most studies, most entrepreneurs think that the reason they couldn’t make their business successful was because they ran out of money, they were targeting the wrong industry, they did not research thoroughly, they lacked expertise and because of conflict of interest between partners.
Now, all the reasons mentioned above are not exactly wrong. They do have some kind of weight, when it comes to a failed business venture. However, making your business a perpetual success is not the same thing as saving your business from failing. See, if your goal is to keep your business running only and saving it from going under, which is a good goal, then this is only saving a business, this is not striving to make it successful. Just barely floating above the water is not equivalent to swimming.
Therefore, most businesses simply fail because they are only trying to avoid failure. They make decisions, which are extremely risk averse in nature and limit the possibility of making huge profits as well. Therefore, in order to avoid failure, the first thing you need is to change the way you think as an entrepreneur.
This brings the blog to the next phase, where you will get some crucial elements to make your startup a complete success.
1. You Need a Vision
Having short-term goals and objectives is fine but to be successful you need to have a vision. Every successful entrepreneur in history had a vision. It is your long-term goal, in easy words. This is what gives you and your organization a direction.
Now, your vision can be a dream as well, just like Bill Gates, who had a dream that one day every desk will have a computer on top of it. At the time when he had this dream, computers were as big as rooms. So, what he did was break his vision into small and achievable goals and objectives, which would lead him and his organization towards accomplishing his dream or vision.
Furthermore, having a vision will not only give direction to your organization but in fact, it will also serve as a highly effective tool in inspiring and motivating your employees to work hard, honestly and with determination.
2. You Need Legal Protection
Yes, legal protection is one of the most crucial elements needed for running a successful business. To make sure no one else uses your name you need to legally secure your business’s name and turn into a brand. You can easily do that by hiring a trademark online service.
Furthermore, it is always a good idea to patent all your ideas, research work, breakthroughs and inventions so that no one else can copy them.
Moreover it is imperative that you hire a legal expert, who can help you make legally sound decisions because legal complications can be very damaging for a business organization.
3. Be Willing to Take Risks
No matter what industry you are in, the risk of failing will always be looming over your head. However, this risk should not stop you from entering into different markets and starting various new ventures. The thing about risk is that the higher the risk is the higher is the reward. Now, why is that so? Well, it is simple, if you think about it. If you are entering into a business with a higher risk than chances are, that you will have either no competition at all or very little competition.
Most people simply step back when they see a high amount of risk. This will allow you to play in an open field and your chances of success will automatically increase.
However, taking risks does not mean that you should enter into business blindly. Entering blindly will not make you a risk taker in fact it will be foolish of you. Therefore, you must do your research, plan things out meticulously and minimize your risk at every possible stage by taking informed and right decisions.
4. Align Your Business Operations
The most important thing in making your business successful is to organize its operations and align them in a smooth manner. You need every department of your organization to work collectively for the achievement of your short-term and long-term goals. To make it happen, you need to formulate strategies and plan how to achieve the synergy effect in your organization.
You must ensure that all the departments are working efficiently and effectively. Every department’s functions should be streamlined to give you the best possible results. You will need to work on saving time, cost, resources, and work smoothly to achieve the maximum possible result by giving minimum input.
5. Use of Technology
Technology is a blessing, when it comes to running a business. It can help you in everything. From better and faster production of goods at costs and reaching out to a larger target audience, with the help of technology you can operate your business on a global scale easily.
Using the latest technology provides you a competitive edge over your competitors. It provides your business organization the ability to provide target audiences with better products and helps you to enter the market faster than your competitors.
Furthermore, it will also help your organization to achieve economies of scale because with automation, you can produce a larger quantity of products than before. This will allow you to bring your fixed cost per unit down to a minimum level and keep a higher profit margin. With this, if you also use technology to increase sales, which you easily can, then your profits will increase considerably and provide your organization a fair chance to grow and expand.